Education Loan to Study in Canada

Canada is a popular destination among international students worldwide due to its excellent universities that provide a wide range of experiences and opportunities. However, pursuing higher education in Canada can be expensive. As we all know Canada is a very popular study-abroad destination among Indian Students. The tuition fees for different programs and courses vary, but the average cost for international graduate students is around CAD 21,000. In addition to tuition fees, you'll also need to budget for living expenses. This is when abroad education loan comes into the picture. Abroad education loans are also considered to be one of the best ways to show proof of funds for Canadian student visas.

Before we begin with the abroad education loans for Canada, let us first understand the living cost in Canada for an international student:

Important points related to living costs in Canada:

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  Travel: Costs depend on the city and the availability of public transit passes. Many universities offer subsidized student passes for traveling.

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  Food: Varies based on eating habits and whether you cook at home or eat out.

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  Health Insurance: Mandatory for international students.

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  Accommodation: Depends on whether you live on-campus or off-campus.

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  Utilities: Includes electricity, water, and internet, which can vary based on your housing type and location.

Types of Abroad Education Loans for Canada 

Broadly, the abroad education loan options for Indian students to study in Canada fall under two brackets:

Secured Education Loan:

A secured education loan is also known as an education loan with collateral. This is a loan where the applicant pledges security along with the loan application. This security can be movable assets (Fixed Deposits, LIC Insurance, and more) or immovable assets (non-agricultural land, residential property, or commercial property). Almost all the public banks in India require collateral to provide you with an abroad education loan.

Unsecured Education Loan:

An education loan that does not ask the borrower to pledge collateral as security is called an unsecured education loan. Not having security leads to an increased risk for the financial institution and that is why you will usually find the rate of interest of these types of loans on a higher side as compared to secured education loans. These loans also demand a co-applicant or co-signer. It is on the basis of the co-applicant’s income and CIBIL score that the loan is.
 

Secured Education Loans for Studying in Canada 

As discussed secured loans are those in which you would need to pledge security as a security. This helps to ensure that you are able to get a higher loan amount when compared with the other loan option which is an unsecured education loan. Pledging security can also benefit you in a way that you will not need a co-applicant for your loan. There are two public sector banks that you can consider to take an education loan for Canada. These are the State Bank of India (SBI) and the Union Bank of India (UBI).

A comparative analysis of these 2 banks in consideration of education loans for Canada has been shown below -

Unsecured Education Loans for Studying in Canada

In case you do not have collateral to pledge, you do not have to worry because there are many private banks, NBFCs, and international lenders that are available which can help you in this scenario. For private banks and NBFCs, you may need a co-applicant/co-signer with a minimum financial income without obligations, but in the case of international lenders, you can get a loan without a co-applicant and collateral. The benefit that you will have by choosing international lenders is that they will provide you loans to study in Canada in CAD that will help you to save forex charges and more such costs but then their interest rate is high.

Thus it can be said that every lender that can provide you with an education loan to study in Canada has their own pros and cons. In order to help you choose an effective lender we have developed a comparative table for all the potential lenders that can provide you with unsecured abroad education loans. The unsecured education loan is applicable for all Bachelors, MBA, Masters, and PGDM courses.

Let us compare the unsecured education loan options from various banks and NBFCs from the table below. Please note that these rates are as of January 2025 and may change.

Study Programs Eligible for an Educational Loan for Canada

Various programs are eligible for education loans in Canada. Here are some of them:

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  Undergraduate courses
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  Postgraduate courses
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  UG & PG diploma programs
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  Doctoral programs
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  Vocational and technical courses

Before applying for a loan, students must ensure their chosen program is eligible for financial support through their preferred loan provider.

Loan Sanction & Pre-Visa Disbursement Process

After the loan is sanctioned, the applicant will receive a loan agreement that will list all the terms and conditions. Please go through the documents carefully before proceeding with the loan disbursement.

For the Canadian visa, you need to have a pre-visa loan disbursement as mentioned in the guidelines of the visa process given by Canada Immigration Authorities. 

Expenses Covered by Abroad Education Loan for Canada 

It is up to you to either take the disbursement of the whole sanctioned loan amount in one go or you will be getting periodical disbursal as per your requirement. Later is preferred, to ensure that you do not end up taking out an additional amount as this will lead to an increased interest. The interest is charged on the disbursed amount not the sanctioned amount.

The expenses that may be covered under loan as per the lender will include -

Eligibility to Get Abroad Education Loan for Canada

To obtain an education loan in Canada as an international student, there are certain prerequisites that must be met.

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  Applicant must have Indian citizenship.
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  These include having a confirmation of acceptance from a recognized Canadian institution for a full-time program
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  You should be at least 18 years old. 
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  Must have a good academic record.
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  Additionally, the chosen course of study should have strong career prospects in relation to unsecured loans, and for secured loans, collateral must be provided.

Documents Required for an Abroad Education Loan to Study in Canada

In addition to the prior mentioned eligibility requirements, it is imperative for students to verify that they possess all the necessary documents prior to obtaining an abroad education loan in Canada. The document list can be exhaustive and that is why GyanDhan also provides you with a customized document checklist that can help you fasten the document submission process. Some general documents which will be required to get a study abroad loan for Canada are -

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  Applicant’s KYC documents.
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  Proof of admission: admission letter from university/institution
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  Fee structure from the university 
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  Loan application form
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  Passport-size photographs
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  Income proof of the co-applicant (for unsecured education loan)
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  Academic transcripts (School and Bachelors)
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  Standardized test scores - GMAT or GRE
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  English proficiency test score - IELTS, TOEFL or Duolingo
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  Resident proof of the applicant and co-applicant
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  Property papers (in case of secured education loan)
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  Bank statement for the last 3 months

Leading Banks and Financial Institutions Offering Education Loans for Canada

Many banks and non-banking financial companies in India offer education loans for studying in Canada. Some of the most popular ones include:

Guaranteed Investment Certificate (GIC)

International students who have already paid their tuition fees to Canadian universities are required to create a GIC account with CAD 10,000 which is the required proof of their living expenses. The plus point with this GIC is that it is considered a short-term liquid investment for a period of one year given by Canadian banks with a guaranteed rate of return.

You can create GIC accounts online in various banks like Scotiabank, ICICI Bank Canada, HSBC, SBI Canada Bank, and the Canadian Imperial Bank of Commerce (CIBC). After the creation of this account, you need to deposit CAD 10,000 along with CAD 200 as the processing fee. Once the fees are deposited, you will receive an “Investment Balance Confirmation”. You can proceed with the visa application after you receive this confirmation.

Once you reach Canada, you will have to create a personal bank account with the bank branch. The first deposit will be CAD 2,000 in your personal account and the remaining CAD 8,000 will be deposited in GIC. These funds are given in CAD 666 each month to support your living expenses.

How to Get an Abroad Education Loan to Study in Canada?

Getting an education loan to study in Canada can be a long process depending on the lender that you have chosen. Thus it is recommended that you start the abroad education loan process for Canada about 4 - 6 months prior to your joining date. If you go to each lender on your own it can be difficult to manage the process at different lenders. GyanDhan is here to help you secure abroad education loan to study in Canada. Below mentioned steps will guide you through the process.

Step 1 - You can start your loan application for a Canadian university by checking our abroad education loan eligibility through GyanDhan.

Step 2 - After filling out the form, one of our loan experts will get in touch with you and will guide you with the next steps.

Step 3 - As per the lender's requirements a customized document checklist will be provided to you that will list down all the documents and alternative document choices (if any) so that it becomes easy for you to arrange all the necessary documents.

Step 4 - After the documents have been submitted, your verification process will start. It can take around 7 - 15 days depending on the lender and the type of loan. Once the loan has been approved you will get an agreement letter to sign. You can see all the real-time progress of your loan application on the GyanDhan user dashboard.

Step 6 - once you sign the agreement you can start the disbursement process at your convenience and the standard process of the lender (some lenders like private banks provide loans in your account while lenders like international lenders disburse loans directly to the university).

Loan Sanction & Pre-Visa Disbursement Process

After the loan is sanctioned, the applicant will receive a loan agreement that will list all the terms and conditions. Please go through the documents carefully before proceeding with the loan disbursement.

For the Canadian visa, you need to have a pre-visa loan disbursement as mentioned in the guidelines of the visa process given by Canada Immigration Authorities. 

Repayment of Abroad Education Loan for Canada

Loan repayment is a factor that you should consider while taking an abroad education loan for Canada with any lender. In repayment as well, there are 3 things that need to be considered while making a choice of lender that is the interest rate, repayment tenure, and the moratorium repayment options. There are different types of repayment tenure available like partial simple interest (PSI), simple interest (SI), and EMI.

Repayment Options by Different Lenders

Do you know: There is a tax benefit that you can get as per section 80(E) when you are taking a loan from SBI, UBI, Axis, ICICI, IDFC, or HDFC Credila. Want to know more? Click here!

It is important to ensure that you have explored all the options of the lenders by comparing them with each other based on different factors before starting your abroad education loan for Canada. With GyanDhan, you can skip all the hurdles by simply contacting us. You can get the benefit from our streamlined education loan process and free help in getting education loans to study in Canada. Our expert education loan counselor will discuss the loan options available to you after understanding your academic and financial profile. Check eligibility for an abroad education loan with GyanDhan and you will not have to worry about your abroad education loan process.

Read Also:

• 
  Educational Loan Options for MBA in Canada
• 
  Educational Loan Options for PG Diploma in Canada
• 
  Educational Loan Options for MS in Canada

Frequently Asked Questions